Charlotte and I stopped at our local Cumberland Farms convenience store the other day on the way to her karate class to pick up a snack, and they had a petition at the checkout counter asking for signatures to support a demand to reduce the swiping fees charged by credit card companies when customers pay with branded debit cards. You know the drill — you go into just about any retail store, whip out your debit card, almost all of which now are issued by Visa and MasterCard, and the clerk asks you “Debit or credit?”. You may or may not know that if you say “credit”, Visa and MasterCard charge the retailer a higher fee for processing the transaction, even though the actual transaction is still a direct debit from your checking account, as if they were processing an actual credit card transaction.
Later, at home, I poked around and found that the convenience store industry association, the National Association of Convenience Stores, is the driving force behind the petition, which is aimed at influencing members of Congress to pass H.R. 2695, the “Credit Card Fair Fee Act”, and it’s related Senate bill, S. 1212. Both bills have been in committee since last summer, and a little juice to move them along is in order.
Not coincidentally, I think, this New York Times article appeared the very same day, explaining in detail how the “debit vs. credit” thing works and how it was engineered by Visa years and years ago, even before debit cards had become widespread. Reading it, the machinations of the credit card companies to make sure that they were positioned to be able to exact their pound of flesh from every retailer in America (and, by extension, every single consumer) on every single transaction should make your blood boil. The interchange fee scheme results in $8.4 BILLION in revenue for the credit card companies, and they quite simply have everyone over a barrel about the whole thing, and are poised to jack up the fees even higher as they look for ways to make up for all the money they are losing from overextending credit to us all. PBS has an episode of “Frontline” that they produced in conjunction with the NYT about the credit card industry, which you can watch in its entirety online here.
Now, I am not a fan of corporations like the ones that operate convenience store chains, but the reality is that the corporations who are directly impacted by the cost of those fees pass most of those costs right along to us. Moreover, small independent retailers are also thwacked by these fees and are often on such slim margins in their businesses that they are caught in a dilemma about paying the fees, passing on costs, or having to consider not accepting non-cash payments. So, if you see one of these petitions at your convenience store, I’d say go ahead and sign it; better yet, I’d say you should probably e-mail your Congressional representatives directly, especially if they sit on the committees where the bills are stuck — House Judiciary and Senate Judiciary. Those are the two most powerful committees in Congress, and this issue is not some minor piece of legislation, it’s a big deal.
